Ray Bitar, the chief executive officer of Full Tilt Poker (FTP), surrendered to U.S. authorities in New York today. The California native had stayed in Ireland since his indictment following the April 15, 2011 (Black Friday) crackdown on illegal gambling operations by the U.S. Department of Justice. Bitar was only one of 11 men indicted by the U.S. government, including industry leaders from PokerStars, Absolute Poker, and alleged illegal payment processors.
The New York Attorney’s Office released a statement on Monday explaining the charges and allegations against Bitar, including gambling, fraud and money laundering, in addition to lying to players about the security of their funds on the website. These were contained in a “superseding indictment” meant to expand on the prior indictment from Black Friday. Bitar faces nine counts, potentially owing millions of dollars in fines and up to 145 years in prison if convicted.
His arrest followed quickly after his arrival in New York City at John F. Kennedy International Airport on Monday morning, according to the press release. At an afternoon hearing in federal court in Manhattan, Bitar plead not guilty to the numerous charges held against him. An alleged accomplice, Nelson Burtnick, is also named in the new indictment and faces eight counts of wrongdoing.
The news was initially leaked on the TwoPlusTwo forums in a staff e-mail in which Bitar claimed his surrender was part of the “process” of securing the sale of FTP to PokerStars. The e-mail in its entirety is below:
To all Dublin Staff,
By now you probably have heard that I have returned to the US to deal with civil and criminal case that are pending against me in New York. We have all worked hard over the last 15 months to preserve Full Tilt’s assets and potential in order to provide for the repayment of all players, and that continues to be our top priority. It is as important as ever that we all do everything possible to make that happen and, hopefully our deal with Poker Stars will very soon make our goal a reality. My return to the US is part of this process.
I am particularly grateful to all of you here in Dublin for your hard work, patience and understanding during this difficult time. I believe that your hard work and dedication should not go unrecognized, and we have made arrangements for Poker Stars to guarantee all July salaries. You should therefore have no concern about coming to work during this period. After that, we expect that your employment contracts will be assumed by the buyer of the company’s assets.
For those that need to reach me, I expect to continue to be available by email and phone starting late Monday, New York time.
In the meantime, please refer any operational questions to **REDACTED**, and any HR questions to **REDACTED**.
Thank you all again.
Raymond J Bitar
This is the best evidence since the speculation of the sale began in late April. Full Tilt had previously been working with the U.S. government and the Bernard Tapie Group to reach a settlement where the sale of company assets could be used as recompense for the hefty civil penalties levied against them. That deal fell through when no acceptable terms could be reached to guarantee swift repayment for players. PokerStars embarrassed Full Tilt in the months following Black Friday, returning funds to players quickly.
Full Tilt’s reputation has suffered greatly since the Black Friday debacle when it was revealed that company assets were insufficient to expediently pay the estimated $350 million owed to customers worldwide. According to Manhattan U.S. Attorney Preet Bharara, “The indictment alleges how Bitar bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed.”
The 2006 passage of the Unlawful Internet Gambling Enforcement Act set the stage for the past 6 years of cat-and-mouse between the U.S. government and online poker operators. The law made it illegal for anyone to knowingly accept funds in relation to illegal online gambling.
Ray Bitar grouped with Chris “Jesus” Ferguson and Howard Lederer to build FTP into the second-largest internet poker company in the world. The indictment alleges that while Full Tilt promised its players that their funds were in a safe account, completely segregated from other company assests, Bitar and his staff used player funds to pay out over $400 million to FTP owners. In its final months of U.S. operation, Full Tilt Poker began crediting players with funds that were never actually received, and as players sought to withdraw these phantom funds, Full Tilt had to slow payments to compensate for their lack of capital. This was the result of the successful attack on and closure of the numerous payment processors who worked to disguise player deposits as non-gambling related activities so American banks would process them.
While reactions are mixed, it is probable that Bitar’s arrest is a positive step for those seeking swift player repayment. With players still owed hundreds of millions of dollars more than a year after Black Friday, the sale of FTP to PokerStars would be a tremendous advancement towards that goal.
FlopTurnRiver.com will have more information as it becomes available.